Article

Editorial: AT&T’s Text Scam Goes Too Far, Demands Opposition

By Jeremy Horwitz ● Thursday, August 18, 2011

SMS text messaging has always been a ripoff—a way for cellular phone companies to charge excessive fees for transferring trivially small, Twitter-like bits of data. Yet in the era before Twitter and iPhones, text messaging took off in Europe, only later addicting North American cell phone users who came to value quick, asynchronous SMS conversations with other people. Not surprisingly, cellular providers came to see the 20¢ per mini-message charges as microtransaction gold mines, and some later found ways to charge even more for MMS multimedia messages—both of which iPhones could handle via e-mail for free.

iPhones were built for multimedia: Apple had years of expertise in seamlessly sharing text, photos, audio, and videos using iChat, and it seemed like a given that iChat would come to Apple’s pocket devices. Yet in what seemed like an uncomfortable concession to new cellular partners, Apple went along with recurring text and MMS messaging charges despite having grown iChat into the world’s best free instant messaging application. Thus an iPhone SMS application was introduced instead of iChat, and subsequently replaced by an updated app called Messages when MMS message support was added. Accustomed to squeals of delight and rounds of applause during launch events, Apple executives had to endure awkward silences and groans whenever they discussed these features.

That’s how the world’s most capable family of smartphones helped to further popularize one of the biggest scams in cellular service. And it’s quite telling that Apple, as soon as it was free of its exclusive contract with AT&T this year, revealed that it wasn’t going to be a text message enabler any more. Starting this fall, iOS 5 will introduce iMessage, a substantial if incomplete reworking of the company’s Messages application for iPhones. iMessage will now enable iOS 5 users to send text and multimedia messages to one another for free, instantly, regardless of whether they’re using iPhones, iPod touches, or iPads. The service will make a determination as to whether the recipient is using iOS 5 or not, using Apple’s free messaging service if so, and otherwise relying on traditional cellular SMS or MMS messaging. With iMessage, Apple will save iOS 5 users untold millions of dollars. Or, at least, that’s what it’s trying to do.

Never missing an opportunity to screw its customers, AT&T has come up with a way to guarantee that its ridiculous messaging service fees will grow despite iMessage. AT&T is now dropping the last of its three lower-priced text messaging plans—a $10 version with 1,000 messages per month, following the earlier killing of a $5 plan with 200 messages per month and a $15 version with 1,500 messages—so it can require new customers to pay $20 per month for unlimited text messaging, or instead pay 20¢ for each text message and 30¢ for each multimedia message. These fees are on top of the $15 or $25 monthly fees that iPhone users already pay for data, the latter of which would otherwise cover the cost of over 10 million SMS messages per month.

Under AT&T’s new fee structures, a user who sends or receives 1,000 text messages per month without an unlimited plan would pay $200—a number that goes up as high as $300 with MMS messages. This is highway robbery, a furtherance of an already objectionable scam, and one that now can now only be insured against for a $20 charge. Existing customers have less than a week to downgrade to the $10 plan before it becomes unavailable, and there is no guarantee that iOS 5 users will be able to turn off or block paid SMS/MMS messages to or from non-iOS 5 devices. A new customer will likely have only two choices: pay a $20 monthly surcharge, or deal with a la carte fees every time a traditional SMS or MMS message comes in.

In the pre-iPhone era, T-Mobile offered Sidekick users a combined “unlimited” plan with data and text messaging for only $20 per month. Today, those same dollars won’t even buy a 2GB limited data plan, though T-Mobile now offers unlimited texting as a comparatively modest $5 or $10 surcharge. Unfortunately, T-Mobile doesn’t sell iPhones, and it’s about to be purchased by AT&T—a company that has been making record profits by offering less service at higher prices, and is now cutting off less expensive options for its dependent users. We were previously all but unfazed by the prospect of AT&T absorbing T-Mobile, but anti-consumer moves like this are making us reconsider our willingness to see this price-conscious competitor disappear from the marketplace, particularly when the company gobbling it up so frequently works against the interests of its customers.

Readers, what do you think? Has AT&T gone too far with its elimination of lower-cost text messaging plans? Should consumers respond by petitioning to block AT&T’s acquisition of T-Mobile? Sound off in the comments section below.

Comments

1

Absolutely they have! I’m am now making it my personal mission to reduce every $ I can from sending to AT&T. They want to screw us over like this, I’ll use Google Voice and iMessage for txt messaging. Time to cut down (or cancel) my AT&T UVerse tv at home too.

They can go to hell, those money grubbing bastards. And the worse part is, the have the nerve to try to tell us it’s in our best interest.

If it’s true that most of the people are already on an unlimited plan anyways, why not leave the unlimited plan and the $10 plan alone? Who cares if only a small portion aren’t on it (which I don’t believe them)? Are those $10 plans taking up space in their warehouse on the shelves? No. It’s obvious they are scared that once iMessage comes out, people would jump off the unlimited plan, and reduce to the $10, if most of their friends had iPhones. This is just AT&T just being greedy and trying to prevent it.

Screw them, I say…

Posted by Kevin in East Amherst, NY, USA on August 18, 2011 at 5:47 PM (CDT)

1

Hear hear!! This article is absolutely correct.

Cellular carriers are a plaque. They will screw you over every chance they get. AT&T is no better or worse than the rest of them. They are a sorry lot.

If you think texting is a rip-off then check out their charges for International roaming. That’s where they really show themselves at their very worst.

Posted by davesmall in East Amherst, NY, USA on August 18, 2011 at 5:53 PM (CDT)

1

Agreed. Bad call.

However - allegedly the change won’t go into effect until August 21st. If possible, I plan to downgrade myself from my current 1500-msg plan to the now-doomed 1000-msg plan so as to grandfather myself into something less than unlimited ahead of the iOS5 release. Nearly *everyone* I text is on iOS and likely to upgrade to iOS 5 quickly. I won’t pay $20 per line for unlimited texts when I will only need a couple hundred at most after iMessage launches.

Posted by Jerrod in East Amherst, NY, USA on August 18, 2011 at 6:30 PM (CDT)

1

Sadly, Verizon - the only other (official) iPhone carrier in the US - will match this move. America’s “Big Two” mobile providers are the textbook definition of a cartel.

So, what’s an iPhone user to do, other than - gasp! - forego the iPhone? Anyone want to start their own phone company?

Posted by Farnsworth in East Amherst, NY, USA on August 18, 2011 at 6:33 PM (CDT)

1

There’s also alternatives like TextFree (which I use on my iPhone4) that give you texting at no cost at all. The app is free, the texts are free.

Every once in awhile I do get a text message from someone who doesn’t know my Textfree number or (more frequently) from someone attempting to recover my Google account mistakenly.

I look forward to iMessage as well. It’s really absurd how much is charged for 160 bytes of data being transmitted in a side channel.

Posted by Zathrus in East Amherst, NY, USA on August 18, 2011 at 6:38 PM (CDT)

1

Almost since the beginning of text messaging has the price of sending and receiving been out of whack with the actual cost of doing so. The prices have slowly climbed to absurd levels—not just AT&T, but Verizon as well—and this change by AT&T is obscene. It’s a blatant money grab that tantamount to punching someone in broad daylight and taking their wallet.

Back in the day, it used to cost a nickel to send a message and free to receive. Now it’s 20 cents each way if you pay a la carte.

AT&T isn’t doing itself any favors on the customer end, nor is it helping its cause with this proposed merger with T-Mobile. Right now, I’m an AT&T customer, but I plan on leaving for Verizon once the next iPhone is announced. (Full disclosure: I had planned on leaving before this announcement due to coverage issues.)

Frankly, I think this is a perfect reason for the government to step in and regulate the cost of SMS. I think we pay too much for wireless service to begin with and adding another $20 a month to a new plan just for SMS is highway robbery.

I can’t wait for iOS 5 and its messaging service. Hopefully someday soon I can ditch paying extra for SMS whoever I’m with.

Posted by cxc273 in East Amherst, NY, USA on August 18, 2011 at 7:39 PM (CDT)

1

SMS messages are antiquated. Remember when you had to (gasp!) talk to people on a phone? This is the way of technology. If you are still stuck with a rotary dial, corded phone at home, and just have a cell for emergencies, but do some texting, then Fred Flinstone, it’s time to join the Jetson’s. Suck it up, there are at least 5 alternates to SMS if not more. Quit being stuck in the past and get a smartphone and stop complaining.

Posted by Bret Rodgers in East Amherst, NY, USA on August 18, 2011 at 8:42 PM (CDT)

1

I felt this way when AT&T dropped the unlimited data plan. It’s highway robbery. We’ve padded their pockets for 4 years and that’s how they repay us.

Posted by Omar in East Amherst, NY, USA on August 19, 2011 at 2:33 AM (CDT)

1

I agree completely. Using the unused network space to send short messages should be free, or close to it. Charging $20/month for the privilege, regardless of how many you send, sounds like you’re paying for “protection” from “something dangerous happening”.

Honestly, why hasn’t everyone banded together around an app that allows texting across carriers and platforms without fees? I use Android, but I’d agree to use HandCent if everyone else would exclusively use it. I’m not buying an iOS device just to have free text messaging - but, if this trend moves to Verizon, when I’m up for renewal on my DroidX, I’d consider moving to an iOS device if most of my friends were texting that way.

But, then again, maybe this is what kills text messaging. I know it started around 1999/2000 in Europe, right? Maybe after 11 years, it’s time to find a new way to communicate that’s universal and free.

Posted by Daniel in East Amherst, NY, USA on August 19, 2011 at 9:27 AM (CDT)

1

I can’t help think that AT&T are shooting themselves in the foot with this move. This might be the final action that pushes users away from using SMS altogether. Secondly, with the potential merger with T-mobile not yet approved, do they really want to be doing anything that appears to be reducing competition and choice in the cell phone industry? They strike me as greedy enough to kill this particular cash cow.

For a comparison, consider the cell phone industry in the UK (which is regulated at the European level). First and foremost, you do not pay to receive texts (which has helped encourage the popularity of SMS). Secondly, providers such as Orange offer cell-phone plans that start at $16.50 per month (single user) which includes *500* text messages. For $41 per month, you can have unlimited texts *and* unlimited data.

Posted by Keith Bradnam in East Amherst, NY, USA on August 19, 2011 at 2:20 PM (CDT)

1

If there is any bit of good news, it’s this: companies like Apple see through the nonsense and are working on ways around it. A universal Android/iOS/Windows 7 app that does messaging over data cuts down messages further. A web interface, even further. As more people move towards smart phones, the cost of sending tiny bits of data instead of hugely expensive SMS/MMS goes down.

It’s not a long-term business plan for AT&T, it’s an attempt to keep alive it’s “goose that lays the golden eggs” until it can’t.

Hey, AT&T, why don’t you try using some of those record profits to upgrade your network?

Posted by Dave in East Amherst, NY, USA on August 19, 2011 at 2:48 PM (CDT)

1

OMG - it may be cheaper to call someone than text them?!?!

OMG - the horror!!!!

Posted by Dan C in East Amherst, NY, USA on August 19, 2011 at 10:59 PM (CDT)

1

Texting has always been an obsurd concept. It’s a poor substitute for actually talking to a real person across a table, room, or on the phone. Social networking is right in there with texting. People say they have friends on Facebook, well some are family and some are friends, but the vast majority are nothing more than groupies. It was great to see the two ham radio operators doing morse code beat the two kids texting on Jay Leno. Texting and social networking are solutions in search of a problem.

Posted by Gene in East Amherst, NY, USA on August 20, 2011 at 6:33 AM (CDT)

1

Texting will be free in the next 10 years (through various apps and such). Telecom is just trying to milk customers now before they lose this source of cheap source of revenue flow.

Agreed that telecom really needs competition. The prices and services are completely behind compared with other countries.

Posted by AF in East Amherst, NY, USA on August 20, 2011 at 1:07 PM (CDT)

1

#7: SMS may be antiquated, but it is *universal*. It works on any type of phone (“feature” or “smart”), any mobile OS (iOS, Android, Symbian, etc.), any carrier (GSM/3G, CDMA, iDEN).

This response also applies to you, #11. Yes, Apple et. al. are developing their own SMS/MMS replacements, but they are doing so only within their respective “walled gardens.” For example, FaceTime only works between Apple OS (iOS, Mac OS) users, and no one else; I suspect the same will hold true for iMessage in iOS5.

Posted by Farnsworth in East Amherst, NY, USA on August 20, 2011 at 1:29 PM (CDT)

1

Oe thing i don’t see mentioned, that I kept reading yesterday was that the unlimited texting plan also gives you unlimited mobile-mobile on any carrier. That might be of benefit to some people. However, tying it to a $20 texting plan bites.

Posted by Tracey in East Amherst, NY, USA on August 20, 2011 at 4:38 PM (CDT)

1

i would have no problem with it if they included 500 texts as part of the mandatory data plan. to give customers an unlimited plan or nothing ultimatum shouldnt be legal

Posted by maroon_tiger in East Amherst, NY, USA on August 20, 2011 at 8:20 PM (CDT)

1

Apple, go ahead and cut the head off the wild beast known as AT&T. The launch company that got you started must die, the bastard parent that spawned your upbringing is now a zombie and must be put down. All you have to do is put iphone 5 on Sprint and T-Mobile (shitty coverage i know but those plans man…) and let the consumers finish the rest. This is ridiculous and AT&T needs to be taught a lesson through the wrath of its golden child.

Hopefully after this, the merge will fall through (actually probably wont happen) and T-Mobile could use that cash to build out its network. 42 Mbps HSPA+ is good enough for me.

Posted by Evan_Beezy in East Amherst, NY, USA on August 20, 2011 at 11:51 PM (CDT)

1

It’s exactly this type of behavior from AT&T that made me get a cheap Android phone and a prepaid carrier. I’d love to have an iPhone, but if the carriers are just continuing to rip their customers off, why should I contribute to that?

The iPhone is nice and all, but it’s definitely not worth the effort of being locked into a postpaid contract with carriers that make crappy decisions like these.

I think it’s time for the US to have a prepaid carrier that sells the iPhone.

Posted by schlomo in East Amherst, NY, USA on August 21, 2011 at 4:15 PM (CDT)

1

SCREW ATT!!!

The iPhone is NOT the Best smartphone but it’s easy to use! Unfortunately, the 3G service is built to use ATT’s 3G network NOT T-Mobile’s version so you can use the Phone on TMo’s network but you’ll have to settle to using TMo’s OLDER EDGE network, IF you jailbreak your iPhone!

ATT’s 2Gb data plan is the F****** worst plan ever esp. for those that go online.

Chicken or the egg….
Why do you NEED or WANT a smartphone if you’re gonna pay for an Arm/Leg for the data plan?
ATT built a data network but is SO POORLY made it can NOT be used efficiently so it charges people alot to limit the access for data.

What’s the point of having a Friggin’ smartphone then?

A NORMAL cell phone would suffice!

SCREW U, ATT!

Posted by MrMojo in East Amherst, NY, USA on August 22, 2011 at 1:30 PM (CDT)